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Rental Asset movement between Companies

  • December 25, 2025
  • 1 reply
  • 28 views
Chamath Kuruppuarachchi
Hero (Partner)
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Hi,

I would like some advice on best practices that your company follows.

My customer’s main business is rentals. The company owns equipment and rents it to customers. The equipments are often shipped to other companies in different countries for customer projects.

I am facing a situation where equipment is rented to another company in a different country. This is an intercompany rental.

We can create a customer order with a rental line from the supply site and ship it to the demand site. However, I am not sure how customs clearance is handled in this case.

When clearing customs, the receiver may need to show customs documents. The customer order provides a proforma invoice with only the rental value, not the full equipment value.

In rental cases, does the receiver use the rental proforma invoice as the import value? Or do we need to create a separate manual proforma invoice showing the full equipment value?

How is this usually handled in the rental industry?

I would appreciate your thoughts and guidance.

Thanks,

Chamath

1 reply

T
Do Gooder (Partner)
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  • TntAnnmaS
  • Do Gooder (Partner)
  • January 2, 2026

 

For cross‑border rentals, customs authorities generally require a customs/commercial value for the equipment itself, not just the periodic rental charge, and the paperwork often needs to reflect that clearly to avoid delay or penalties.

Common industry practice

  • For cross‑border project rentals of machinery/equipment, the more conservative and widely used pattern is:

    • Use your rental CO / rental invoice only for commercial/billing purposes between the companies.

    • Issue a separate customs proforma/commercial invoice for the shipment showing: full customs value, clear remark “rental / temporary export,” no transfer of title, and reference to the rental contract.​

  • Many companies also use temporary import / ATA Carnet or similar schemes so the equipment can re‑enter without double taxation, but the customs invoice still reflects a realistic equipment value.

Practical guidance for your scenario

  • Do not rely solely on the rental‑value proforma from the IFS rental CO as the import value unless local customs and your broker explicitly confirm this is acceptable for that route and arrangement.​

  • Work with a customs broker in each involved country to define:

    • Whether you can use a temporary import regime.

    • Which valuation method and value basis they want on the customs invoice for each type of equipment.​

  • In the ERP process design, treat the rental document flow and the customs documentation flow as two related but separate outputs:

    • Rental CO/proforma or invoice for intercompany charging.

    • Dedicated customs/commercial proforma for border clearance, with full value and correct customs language.

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